Ahead of the Labor Day holiday weekend, the China stock market has closed lower in back-to-back sessions - although it had retreated just 10 points or 0.4 percent in that span. The Shanghai Composite finished just above the 2,395-point plateau, and now investors are hoping to find support when the market kicks off trade on Wednesday.
The global forecast for the Asian markets is upbeat, thanks to some better than expected data from the U.S. manufacturing sector as the Institute for Supply Management reported that activity in the U.S. manufacturing sector unexpectedly expanded. Technology stocks figure to fuel the rally, along with properties, financials and oil companies. The European and U.S. markets finished higher and the Asian bourses are expected to follow suit.
The SCI finished modestly lower on Friday following consolidation from the financial shares and the property stocks.
For the day, the index declined 8.38 points or 0.35 percent to finish at 2,396.32 after trading between 2,393.87 and 2,408.42. The Shenzhen Composite Index lost 2.68 points or 0.3 percent to end at 940.35.
Among the decliners, Chongqing International Enterprise Investment plummeted 4.7 percent, while Shanghai Wanye Enterprises lost 1.8 percent, Cofco Property (Group) fell 1.7 percent, Soochow Securities plunged 6.3 percent, Shanxi Securities retreated 4.8 percent and GF Securities shed 3.1 percent.
The lead from Wall Street is positive as stocks finished higher on Tuesday, although they receded from their highs earlier in the day. Despite the pullback in the latter part of the day, the Dow still finished the session at its best closing level in over four years.
The rally followed a report from the Institute for Supply Management showing that activity in the U.S. manufacturing sector unexpectedly jumped. The ISM's purchasing managers' index climbed to 54.8 in April from 53.4 in March, marking its highest level since 55.8 in June 2011. A reading above 50 indicates an expansion in activity. Economists had a reading of 53.0.
Meanwhile, the Commerce Department reported that construction spending edged up by 0.1 percent in March compared to expectations for a 0.5 percent increase. An increase in private construction spending was largely offset by a drop in spending on public construction.
Among individual stocks, shares of PLX Technology (PLXT) surged 67.3 percent after the company agreed to be acquired by Integrated Device Technology (IDT) in a transaction valued at $330 million. Agriculture giant Archer Daniels Midland (ADM) also posted a strong gain after reporting fiscal third quarter earnings that fell year-over-year but still beat estimates.
The major U.S. averages pulled back from their highs on Tuesday but still finished higher. The Dow rose 65.69 points or 0.5 percent to finish at 13,279.32, while the NASDAQ edged up 4.08 points or 0.1 percent to end at 3,050.44 and the S&P 500 climbed 7.91 points or 0.6 percent to 1,405.82.
In economic news, China will on Wednesday see the results of the HSBC manufacturing PMI for April; it came in with a score of 48.3 in March.
by RTT Staff Writer
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